Taking stock of a new business model for long-term care

These are uncertain times for long-term care operators.
The nation is aging, the government is looking to cut costs, hospitals may or may not control your future Medicare destiny, and new innovations are changing the art of what's possible.

Given these realities, it's getting tougher to figure out how and where to compete in the changing healthcare landscape.So what's an operator to do?

Here's my suggestion: Go to your local grocery store. Note I didn't say go shopping. Instead, simply take a good look around. You think long-term care residents have different tastes and preferences? Then briskly walk to the soda aisle. Not only will you see dozens of different beverage brands, you'll see them packed in all sorts of containers. And that's just one aisle. Look around. The rest of the store is actually far more diversified.

But virtually unlimited food choices are only part of the story. Consider the aesthetics. Chances are your local grocery store is immaculately clean and well organized. And it's also likely that pleasant, upbeat music is playing in the background.

Need you fear asking for help because the staff is too busy or surly to respond? Hardly. Chances are that the person who helps you at the store will be friendly, and may even walk you halfway across the place just to make sure you find that certain kind of paprika you're looking for.

So let's quickly review our shopping list: lots of choices, immediate, friendly help and an atmosphere that makes you feel both valued and welcome. Sound like your typical skilled care facility?

But you say you can't do all that frilly stuff the stores do because your margins are too thin? Well then, find a better excuse. Here in Chicago, the two big grocery chains are Dominick's Finer Foods (a subsidiary of Safeway) and Jewel-Osco (which is owned by SuperValue). Safeway's profit margin last year was a massive 1.18%, while SuperValue's was even less – 0.39%. In fact, none of the nation's top 20 food chains had margins as high as 5%.

The real challenge ahead for long-term care operators may not be fiscal, but psychological. More operators need to start thinking and acting like retailers. That begins with considering the experience from the customer's, er, resident's point of view.

Start giving your residents — and their families — a more positive experience, and they'll give you one back. Easy to say. Not so easy to do. Yet there's a business right down the street doing that every single day.

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Daily Editors' Notes

McKnight's Daily Editor's Notes features commentary on the latest in long-term care news. Entries are written by Editorial Director John O'Connor on Monday and Friday; Staff Writer Tim Mullaney on Tuesday, Editor James M. Berklan on Wednesday and Senior Editor Elizabeth Newman on Thursday.